This is a Golden Age for health care. But at the same time new treatments and cures are being developed, Americans are properly concerned about costs. How can the health care system continue to innovate while providing value?
 
To make the best decisions, policy makers and the public need the facts. That is where we come in. With numerous links to research and media reports, Cost-of-Health-Care News is an online publication that provides news and analysis of who is paying how much for what – and why. 

Our Newsletter

Issue No. 61: ICER, Which Assesses Value of Drugs, Finds
Its Own Values Under Significant Criticism


​No simple formula determines the price of a drug, nor is there a single price for a drug in the U.S. multipayer system, but there is a consensus that the value of a medicine – its effectiveness for patients – should be the prime factor. Unfortunately, the leading organization that promotes value pricing has serious shortcomings, both in its overall approach and methodology.

‘Examined for Value by a Credible Body’

Currently, in a nation where 91% of Americans have health insurance, most prices are settled through negotiations between pharmacy benefit managers (PBMs), working for insurers and health plans, and pharmaceutical manufacturers, with such factors as competition, effectiveness and other market factors at play.

But isn’t there a way to gauge the effectiveness of drugs so that prices, reflecting true value, become easier to determine, almost formulaic?

In a July 16, 2018, comment letter responding to the Trump Administration’s “Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs,” the Pharmaceutical Care Management Association, a trade group for PBMs, stated:
 
To achieve a reasonable level of pricing, the drug could be examined for value by a credible body that would estimate a reasonable range of price for a given drug, based on the value it is expected to bring to patients. One such entity is the Institute for Clinical and Economic Review (ICER).

ICER, founded in 2006, describes itself as “an independent and non-partisan research organization that objectively evaluates the clinical and economic value of prescription drugs.” By analyzing “all clinical data” and convening “key stakeholders – including patients, doctors, life science companies, private insurers, and the government – ICER translates “the evidence into policy decisions that lead to a more effective, efficient, and just health care system.”

Sounds perfect, but there have been problems, big ones. Consistent criticism led ICER last year to ask for public comment on its “value assessment framework” for 2020 to 2023. ICER has asked patient representatives to review its draft drug reports, and in April the organization appointed its first-ever “Vice President for Patient Engagement.”

Despite these steps, the “800-pound gorilla of cost-effectiveness analyses,” as Shea McCarthy called ICER in STAT News, has provided no transparency into how stakeholders are affecting the “economically justified price” that ICER calculates for the drugs it examines.

Read More Here.

What Others Are Saying

"The anger directed at the pharmaceutical and biotech industries overall is misdirected. The single biggest driving force for increased health-care spending in the U.S. is the rising cost of labor, not drugs."

- Michael Mandell of the Progressive Policy Institute (PPI):
"Even if pharmaceutical spending were rising as a share of total health care spending, but that rise was due to pharmaceutical investments driving down expenditures in other health care areas (e.g. a reduced need for more expensive surgeries), then it would still be inaccurate to argue that pharmaceutical spending is driving overall health care inflation."

-Wayne Weingarten of the Pacific Research Institute

Newsletter Archive

Issues 41 - Current
​

NEW! Issue No. 61: June 18, 2020
ICER, Which Assesses Value of Drugs, Finds Its Own Values Under Significant Criticism

Issue No. 60: February 20, 2020
​Dozens of New Drugs  Approved Last Year: What All the Innovation Is Telling Us

Issue No. 59: January 30, 2020
Cancer Death Rate Registers a Record Decline; Reminder That Drugs Have Massive Benefit as Well as Costs

Issue No. 58: January 9, 2020
Rebate Reform, Suddenly Dropped by the White House, May Be Convincing Enough for a Comeback

Issue No. 57: December 19, 2019
For Cost Containment Policy Makers At Last Turning Towards Hospitals

Issue No. 56: December 11, 2019
Study Shows How Prescription Drugs Can Be Key to Constraining Other Health Care Costs

Issue No. 55: November 14, 2019
'March-In' to Nowhere

Issue No. 54: October 29, 2019
How to Fulfill the Promise of Biosimilars

Issue No. 53: October 8, 2019
Comparing US Health Costs With the Rest of the World

Issue No. 52: September 19, 2019
Trade Deals Can Narrow Drug Price Gap With Europe, Protect U.S. Intellectual Property

Issue No. 51: August 12, 2019
Distortions About Drug Prices Impede Health Care Debate

Issue No. 50: July 23, 2019
Senate Plan for Medicare Price Controls Raises Ire, But Benefit Redesign Is Broadly Attractive

Issue No. 48: June 27, 2019
Time to Cap Medicare Part D Out-of-Pocket Drug Costs?

Issue No. 47: June 13, 2019
Major Issues With the International Pricing Index

Issue No. 46: May 31, 2019
Where the Cost Savings Are: Hospitals

Issue No. 45: May 10, 2015
SPECIAL UPDATE - Rebates Redux: Assessing the Costs and Benefits of Reform

Issue No. 44: April 25, 2019
The Myth and the Danger of Importing Drugs to the United States

​Issue No. 43: April 12, 2019
Administration Moves Swiftly to End the Opaque System of Rebates

Issue No. 42: March 27, 2019
A Busy Time on the Pricing Front

Issue No. 41: February 28, 2019
PBMs Under Attack

Issues 21-40
​

Issue No. 40: February 13, 2019
Government Statistics and Express Scripts Data Show Drug Prices Fell in 2018. That's Hard For Media and Politicians to Acknowledge.

Issue No. 39: January 17, 2019
Where are Health Costs Rising Most?
Hospitals. And Here is Why.

Issue No. 38: December 20, 2018
Dangerous Target Practice: Taking Aim at Drug Patents

Issue No. 37: December 4, 2018
The Truth About Drug Prices: They're Rising Less Than Inflation

Issue No. 36: November 8, 2018
The Right Way and the Wrong Way to End Disparity Between U.S. and European Drug Prices

Issue No. 35: October 25, 2018
A Surprisingly Simple Way to Save Lives and Money

Issue No. 34: October 9, 2018
Are ICER and the QALY the Right Way to Manage Access to Live-Saving Medicines?

Issue No. 33: August 28, 2018
How Much Do We Spend on Pharmaceuticals? Research Clarifies Answer to Complex Question

Issue No. 32: July 31, 2018
The U.S. is Developing Innovative Medicines in Abundance, to Fight Cancer and More

Issue No. 31: June 5, 2018
Taking Dead Aim at the Role of Pharmacy Benefit Managers in Raising Drug Costs (Plus the Gag Rule and More on 340B)

​Issue No. 30: May 8, 2018
A Day of Reckoning Approaches for 340B, the Controversial Drug Pricing Programs

Issue No. 29: April 19, 2018
Narrowing the Gap Between U.S. and Foreign Drug Costs

Issue No. 28: March 22, 2018
Redesign Insurance Plans and Reduce the Threat of High Drug Costs

Issue No. 27: March 1, 2018
Making Sense of Health Spending

Issue No. 26: February 12, 2018
Smallest Increase in Drug Spending in a Quarter-Century

Issue No. 25: January 23, 2018
For $70 a Year, Drug Innovation Is a Bargain

Issue No. 24: December 21, 2017
Spending on Drugs Rises 1.3% (Yes, 1.3%)

Issue No. 23: December 4, 2017
Biosimilars Hold Hope for Lowering Drug Costs and Improving Patient Access, but Challenges Surface

Issue No. 22: November 20, 2017
Rising Minimally: That’s the Non-Fake News About Drug Prices

Issue No. 21: October 10, 2017​​
What It Costs to Make a Pill

Issues 1-20
​

Issue No. 20: September 18, 2017
The ‘Deleterious Consequences’ of Popular Insurance Designs

Issue No. 19: August 28, 2017
Focus on Where the Spending Is: Hospitals

Issue No. 18: August 15, 2017
To Lower Health-Care Costs, America Has to Reduce Unhealthy Behaviors

Issue No. 17: July 20, 2017
Debunking the Mythology of Drug Costs

Issue No. 16: June 22, 2017
Importing Medicines Creates Broad Threats to Public Safety

Issue No. 15: June 12, 2017
The Lessons of Part D's Success

Issue No. 14: May 31, 2017
Misplaced Incentives Raise Cost of Administering Drugs in Hospitals Sky-High

Issue No. 13: May 11, 2017
The Truth about PBMs

Issue No. 12: April 27, 2017
Government-Negotiated Drug Prices: Another Bad Idea Bubbles Up from the Depths

​Issue No. 11: April 18, 2017
Importing Drugs: Safety Risks, Less Access, and Little or No Savings

​Issue No. 10: March 30, 2017
The States as Drug-Price Regulators: A Bad Idea That's Catching On

Issue No. 9: March 15, 2017
Drug Prices Rise 2.5%; That's the Same as Inflation

Issue No. 8:  March 2, 2017
Is the Problem Health Care, Or Is It Health?

Issue No. 7:  February 15, 2017
Financial Effects of ACA on Health-Care Sector

Issue No. 6:  February 2, 2017
Americans Have Greater Access to New Medicines for Cancer

Issue No. 5:  January 19, 2017
How Industry Concentration Affects Health Costs

Issue No. 4:  January 5, 2017
Surprising Revelations in a Deep Dive on Health Costs

Issue No. 3:  December 21, 2016
Rising Health Costs: How to Hold Them Down by Broadening Our Thinking

Issue No. 2:  December 14, 2016
New Reports on Health Spending Need Context

Issue No. 1:  November 30, 2016
Study Shows U.S. Health System Often Delivers Less for More